Nokia unveils mobile iTunes rival

Nokia today threw down the gauntlet to Apple's iTunes with its own downloadable music service aimed at Europe's mobile phone users.

Launching towards the end of the year in the UK, the service will charge 79p a track - the same price as iTunes but considerably cheaper than many of the music services offered by the mobile phone networks themselves.

However, unwary British consumers may end up paying well over the odds for tracks if Nokia cannot persuade the nation's five mobile networks to sign up to the service, which ostensibly competes with their own music products. Some networks are already threatening to block the Nokia service altogether, by refusing to sell handsets with the necessary software installed.

Nokia today unveiled four new handsets designed to work with the new service, from the top-of-the-range N95 - which can store roughly 2,000 songs - to the N81, which has an iPod-like touch-sensitive navigation wheel; and two mass-market phones, the N5310 and N5610.

Nokia's music store also allows consumers to load their own CD collections onto their computer and then move them over to their Nokia phone, in imitation of the way iTunes works with an iPod.

Apple's flagship music service currently accounts for about four-fifths of the UK downloaded music market, and its iPhone has already sold millions since its launch two months ago in the US. The iPhone is expected to be available in the UK in time for Christmas, with mobile phone network O2 believed to have secured an exclusive deal.

Nokia today admitted that its new music service - part of its Ovi range of mobile internet services - owes a lot to the success of the iPod, but the world's largest mobile phone manufacturer believes that in the future mobile phones, and not standalone MP3 players, will come to dominate the music market. That is why its two top-of-the-range music phones - the N81 and N95 - can download tracks "over the air" from the Nokia store.

Nokia chief executive Olli-Pekka Kallasvuo predicted that the company's online music store, which has already signed up the world's four major record labels, will have a catalogue of millions of tracks. "Our target is to have all the music in all the world available to everybody," he added.

The UK's mobile phone operators, however, fear that Nokia is trying to lure customers away from their own fledgling music services. One network, 3, has already said it will not stock the N81, while several others are demanding a meeting with Nokia to discuss its plans.

All the UK operators have their own music services, with prices ranging from 99p a track on Vodafone to £1.29 on 3.

These prices include the cost of actually downloading the track over a mobile network. The concern for British customers is that if Nokia cannot secure deals with the mobile networks, customers signed up to its music service could end up paying several pounds more for their tracks because of the download charge levied by the networks.